Making the complex easy to understand

Most discussions of interest rate risk (IRR) jump immediately into calculus equations I haven't seen since my undergrad days more than 20-years ago. It's usually hard to find a simple line or two of explanation that doesn't require me to go back to my college text for reference. However, there is one book I do keep close at hand because it addresses complex interest rate risk issues using (mostly) plain language. The book is Interest Rate Risk Management for Banks by Leonard M. Matz. Although I've never spoken with him personally, I've heard Mr. Matz speak at a conference or two, and I'm always impressed by his simpler approach to communicating such a complex subject.

It would be easy for the book to dive right into the first derivative blah, blah, blah that you so often find in books on IRR. What's great about this book is that the author makes a genuine attempt to talk about complex IRR issues as if he were speaking with senior bank management. I am not suggesting that senior bank management is thick-headed when it comes to IRR, but like anything else, if you're not immersed in the subject every day things are a little less clear.

I would make this book suggested reading for all of our clients if it weren't for the steep price. Too bad the book isn't available from amazon.